13 Comments on "The Coming Global Pension Crisis"

Plantagenet on Sun, 1st May 2016 12:29 pm 



The SS systems doesn’t take in enough FICA taxes now to pay all the recipients—it has to add in ca. 250 billion dollars from the general fund, which in turn has to borrow from China etc. to have enough money run the federal government.

This can’t go on indefinitely, especially as the number of folks on SS continues to grow rapidly.

paulo1 on Sun, 1st May 2016 1:24 pm 



The Govt. raided the contribution surpluses over the years for general revenue items, including tax cuts for the wealthy, bank bailouts, and ME wars. Now..there is a funding crunch due to funding shortfalls and the recession. Now is the time to go to the surplus fund and use it to remain solvent. Now is the time to redeem the IOUs the Govt placed in the fund when they took the money.

Oooops, they spent it already.

onlooker on Sun, 1st May 2016 1:50 pm 



As bad as the Pension situation, the ultimate betrayal of public trust is the type of planet we are leaving the younger and future generations. As I heard a quote “We do not inherit this planet from past generations we borrow it from future ones”

JuanP on Sun, 1st May 2016 2:11 pm 



People under the age of 50 are highly unlikely to get their contributions back. Forget SS or pensions. It is better to invest in land, safe shelter, food, water, useful skills, and tools and supplies.

Boat on Sun, 1st May 2016 2:39 pm 



paulo,

If your talking US banks after the 2007 crash, the bailouts were paid back with interest. In housing the government took over much of the market and now has made 10’s of billions.

paulo1 on Sun, 1st May 2016 3:14 pm 



The Govt,..as far back as Reagan raided the surpluses placed in Trust, and replaced them with basically IOUs (non-negotiable US treasuries). Now, that the surplusses have been spent politicians are warning the fund will be insolvent. However, if the Govt. all Govt, had left their mits off the surplus funds there would not be a problem.

“The week after his State of the Union speech, Bush downplayed the importance of the Trust Fund:

Some in our country think that Social Security is a trust fund – in other words, there’s a pile of money being accumulated. That’s just simply not true. The money – payroll taxes going into the Social Security are spent. They’re spent on benefits and they’re spent on government programs. There is no trust.[23]

These comments were criticized as “lay[ing] the groundwork for defaulting on almost two trillion dollars’ worth of US Treasury bonds”.[24]

However, even right-leaning politicians have been inconsistent with the language they use when referencing Social Security. For example, Bush has referred to the system going “broke” in 2042. That date arises from the anticipated depletion of the Trust Fund, so Bush’s language “seem[s] to suggest that there’s something there that goes away in 2042.”[25] Specifically, in 2042 and for many decades thereafter, the Social Security system can continue to pay benefits, but benefit payments will be constrained by the revenue base from the 12.4% FICA (Social Security payroll) tax on wages. According to the Social Security trustees, continuing payroll tax revenues at the rate of 12.4% will enable Social Security to pay about 74% of promised benefits during the 2040s, with this ratio falling to about 70% by the end of the forecast period in 2080.[26]

https://en.wikipedia.org/wiki/Social_Security_Trust_Fund

I have a small pension having worked as a high school teacher for 17 years. In the 80s a law was passed that restricted the BC Govt. from raiding our pension funds to finance their meg-projects. Since that time we have operated a pre-funded plan which means my contributions paid for my pension ahead of time. Our pension is very sound and fully funded witha surplus that provides a COLA. Without this change all BC Govt pensioners would be in the same boat as so many municipal and state pensions that are going broke.

If you run a pension plan like Bernire madoof ran his investment firm, guess what happens? If you take any surplus and use them for the Govt whim of the time, then eventually the fund is shorted,

So Boat, The US Govt used pension surplus held in trust to bail out the banks, pay for the wars, what have you. Yes, the banks eventually paid the loans back, with interest. The problem is, THE GOVT DID NOT PUT THE PAID BACK MONEY BACK INTO THE SS TRUST FUND where they found it. It got spent too, as well as trillions in addition.

Hawkcreek on Sun, 1st May 2016 3:22 pm 



Boat,
How much of the bank paybacks came from profits made by receiving zero percent loans, and then “investing” or lending at much greater rates. It isn’t hard to see that the banks became profitable again primarily because of free money given to them by the govt. Hell, anyone could make money like that.
And did the “money” lent into existence help, or hurt, the average citizens lifestyle?

Plantagenet on Sun, 1st May 2016 4:55 pm 



@Paulo

Its nuts to blame Reagan for the current shortfall in SS funds. The program was intentionally set up by FDR to be a pay-as-you-go system. The surplusses have been going into the General Fund for the last 8 decades.

Whenever a shortfall developed in the past, SS benefits have been cut and taxes raised to cover the shortfall. Unfortunately, Obama has taken no action to cover the current SS shortfall, leaving this problem for President Hillary to deal with when she takes office.

Cheers!

String900 on Sun, 1st May 2016 5:33 pm 



Republican Tax Policy – Rape the 99% – Lie about the budget, steal funds from Social Security – You wonder there isn’t a French Revolution in the USA.

Boat on Sun, 1st May 2016 5:37 pm 



Reagan made military spending popular by crediting the build up for the break up of the USSR. If you add up military spending and the interest it would eclipse the national debt.
Solution? Match China’s military expenditure and cost of wars, bingo, no more deficit.

makati1 on Sun, 1st May 2016 5:49 pm 



ALL retirement funds will disappear, or be drastically reduced, when the investments they are supported by go under. Those funds don’t have a big pile of actual dollars in some safe. They have stocks, bonds and other paper/digital trash. That includes 401s, mutual funds, etc. In the Us, I expect the government to “nationalize” most, if not all of them in the next year or so and trade them for US Treasuries, more paper trash. They will then control any monthly disbursement and will be able to stop payment anytime they want on anyone they choose, just like SS.

As for Social Security, your US IRS tax payments fund it and they are shrinking. However, the 60 million plus SS recipients will continue to get something as long as the US government and taxes exist. It cannot afford to alienate that many citizens. They will print the money if necessary. At least that is how I see it. I’m prepared for that day. Are you?

joe on Mon, 2nd May 2016 2:10 am 



Guys wanna know the plan for the care of the old? Stuff em in homes and forget em and hope they die quickly. As the age pyramid widens at the top the old simply wont be catered for. Prepare yourselfs for the future spectacle of the old being treated as political footballs as our inner nazis argue about euthanasia for old people and the ‘right to die’.

makati1 on Mon, 2nd May 2016 6:24 pm 



joe, if you are very very lucky, you just might be “old” someday. Be careful what you want for others. It may come back to haunt you.

In other countries, the “old” are cared for by their family. They are respected for their experience and wisdom. America has only greed to live by, that is why it is disintegrating and the sooner the better.